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NWF reports Growth despite lower Fuels earnings
2nd February 2010
First half earnings rose at NWF Group Plc, the AIM listed Nantwich based feeds to fuel distributor, despite a fall in turnover as a result of good animal grazing conditions last autumn coupled with a decrease in crude oil prices.
Efficiency gains at the company's NWF Boughey Distribution business pushed group pre-tax profits up 11.1 per cent to £2m in the 6 months ending November 30, despite a decrease in revenue from continuing operations of 11.4% to £175.5 million.
At the Group's Fuel Division, revenue fell by 11.3% to £113.7 million as a result of oil prices falling from the previous year. Brent crude average in the period was $71.23 per barrel compared to $102.50 per barrel in the prior year.
Operating profit at the Fuels Division decreased from £1.3 million in the comparable prior year period to £0.7 million. However, during the corresponding period in 2008, the market benefited from a significant reduction in oil prices and a cold winter, which started in October. Whilst overall volume remained unchanged at 166 million litres, unseasonably warm autumn conditions reduced demand for higher margin domestic heating oil and the depots consequently targeted commercial business to maintain vehicle utilisation and literage.
Commenting on the company's results, Mark Hudson, Chairman, said 'NWF has delivered a first half performance in line with expectations. Food Distribution has continued to make good progress, delivering a significant profit improvement on the prior year as a result of greater operating efficiency and robust levels of demand. Good autumn grazing conditions had a negative impact on Feeds as herds were outside for longer than normal which resulted in lower levels of demand. Fuels has continued to trade in line with expectations throughout the period. Finance costs are lower as a result of lower levels of net debt.'
NWF's Fuel Dvision headquartered at Wardle, near Nantwich in Cheshire, employs 151 people and operates over 60 tankers from 13 locations across England and Wales. The business supplies c.380 million litres per annum and is one of Texaco's largest distributors in the UK and Europe, as well as a leading distributor of Conoco and Total products.
